APPENDIX A

TENDER EVALUATION GUIDE

SOUTH YORKSHIRE PASSENGER TRANSPORT EXECUTIVE

TENDER EVALUATION METHODOLOGY
AUGUST 2003

1.

INTRODUCTION

1.1

The principal purpose of tender evaluation is to determine the tender which best
meets the requirements of the Executive and delivers best value. It should be a
rigorous examination and comparison of all submissions received on an equal and
consistent basis without bias

1.2

In respect of achieving the Executives aims through procurement, tender evaluation

is the most crucial/important element of the procurement process. Identifying the
right tenderer for the task. A good contract or specification will not necessarily make
a poor quality tenderer a good service provider.

2.

PRINCIPLES

2.1

However the evaluation is carried out, there are some guiding principles that relate to
all evaluation exercises. These include:(i)

It is an absolute requirement of public sector competitions that all companies

are given an equal opportunity to succeed.

(ii)

The criteria for evaluation must be established prior to Invitation to Tender

and remain consistent and objective throughout the process.

(iii)

The reasons for rejection must be documented and if challenged, backed up

by full documentary evidence that will show that the evaluation was properly
conducted.

2.2

Fairness transparency and objectivity are the overriding principles.

3.

AWARD CRITERIA

3.1

There are 2 types of award criteria and these are commonly referred to as:-

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(i)

Lowest priced compliant tender

(ii)

Most economically advantageous tender (price/quality).

3.2

A determination must be made at the outset which award criteria is to be utilised.

3.3

The lowest priced compliant tender criteria is acceptable for simple procurements or
where a tight input specification is utilised.

It is not suitable for more complex

procurements or output based specifications.

3.4

Most economically advantageous criteria strikes a balance between price and quality.

4.

TYPES OF EVALUATION MODELS

4.1

It is acknowledged from the outset that no one model will fit all procurement

scenarios.

4.2

Evaluation models will range from a very simple model, i.e price only ranking,
through to very complex mathematical models using pre-determined weightings and
sensitivity tests. Mathematical models should not combine price and quality into a
single score.

4.3

For any procurement other than a procurement of simple content or where a tight
specification is given, then a price/quality evaluation model should be utilised. An
example of the recommended model is given at Appendix A. This model does not
rely on a strict arithmetical formulae, but requires each tender to be assessed from a
quality perspective using the same criteria, and then requires price/cost to be
considered with objective reasoning being given if it is proposed to accept a tender
which is more expensive than a tender that meets the minimum quality standards.

5.

FINANCIAL EVALUATION

5.1

The key is to assemble all the aspects of the tender that have a direct and indirect
financial impact on the Executive.

These should be the financial costs that the

Executive will be subjected to throughout the life of the contract e.g. life cycle,
ongoing maintenance costs, licences, etc.

These costs may also include the

consequences of selecting the supplier e.g. upgrade to IT systems.

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5.2

Tender price is the only common denominator when comparing tenders and should
be kept separate from the evaluation of quality.

6.

ISSUES TO BE CONSIDERED WHEN EVALUATING TENDERS

6.1

Regardless of the way price is factored into the evaluation model, the quality
component needs breaking down into a number of criteria. A non-comprehensive list
of criteria is given at Appendix B. The criteria should be weighted to reflect the
relevant importance of each criteria, the weightings set on a project specific basis.
The criteria could be further broken down to a sub-criteria level to indicate what
factors fall within that element of the criteria. Examples are given in Appendix C.

6.2

Who should undertake the evaluation? It is particularly important to give thought to

whether the evaluation should be undertaken by one or more persons, and if more,
whether they should undertake the evaluation separately and the scores be brought
together in some manner. Evaluation by 2 or more members of staff takes away
some of the risk of bias.

It is recommended that at least 2 persons separately

evaluate the tenders.

6.3

The evaluation procedure should, other than in exceptional circumstances and, in

any event, for all EC procurements, be finalised prior to the issue of the Invitation to
Tender. It is good practice to dispatch the evaluation model with the Invitation to
Tender. Once the evaluation model has been published then this should be adhered
to.

6.4

What information should be utilised to evaluate the tenders?

Examples include:

Method Statements

References

Interviews

Tender supporting documents (sample products if relevant)

Financial standing if not done at earlier evaluation stage, i.e. if this is not a
restricted procedure, etc.

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6.5

It is wise to ensure relevant experience is recent and where professional services are
sought that the nominated staff have personal experience in the work areas sought.

7.

MAKING THE AWARD DECISION

7.1

To make the final decision, the financial and non-financial evaluations need to be
brought together.

7.2

The evaluation criteria methodology should be designed to ensure that the

successful tenderer meets all essential requirements.

7.3

It may well be that tenders are rejected prior to the financial elements of the
evaluation being incorporated due to the fact that the tender has not passed the predetermined quality threshold for each area of work and for the project as a whole.

7.4

The evaluation methodology need not employ a pre-determined mathematical

scoring to weigh quality differences against price differences.

It must however

provide a firm basis for an objective and auditable evaluation of (a) whether a tender
meets the Executives essential requirements, and (b) the importance of qualitative
differences between the tenders.

Full written records are required to be kept

justifying decisions that are taken.

7.5

Strong evidence is required to reject a cheaper bid that is compliant with all
mandatory conditions and requirements.

8.

DISTRICT AUDITORS COMMENTS

8.1

District Audit in their Use of Consultants Audit of November 2001 made specific
comments in respect of tender evaluation. Three specific recommendations were
made in respect of tender evaluation as follows:-

R10

-The Executive should ensure that tender evaluation models are devised prior
to inviting tenders and that sufficient details are provided to tenderers to allow
them to prepare their tenders to suit the prescribed evaluation regime.

R11

-The Executive should ensure that evaluation criteria are robust and not
capable of distorting outcomes in a manner which may not ensure best value
for the organisation.

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8.2

The methodology proposed covers the issues raised in 8.1 above.

9.

EVALUATION IN THE EXECUTIVE

9.1

Directors, Management Board and Executive Boards are responsible for awarding
contracts. Therefore, they

need to be in a position to understand the process that

has taken place and why they are being asked to recommend a particular award.
They need sufficient information to be able to query recommendations and
assumptions.

9.2

For contract awards which are to be based on the most economically advantageous
criteria the following will be the normal process:

Estimated contract value established

Expressions of interest (where restricted procedure utilised)

Specifications/contract conditions drafted

Draft tender evaluation model agreed

Tenders invited

Tenders evaluated

Award recommended Director, Management Board and/or Executive Board

Contracts completed

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APPENDIX A
TENDER EVALUATION MODEL
ASSESSMENT SHEET QUALITY

STAGE 1

TENDERER: XYZ Ltd.

QUALITY CRITERIA
(Example only)

ASPECT
WEIGHTING
(A)

Understanding of Requirements

20%

Added Value

15%

Timetable

20%

Relevant Experience

25%

Capability

20%

ASSESSOR:
WEIGHTED
MARKS
MARKS (C)
AWARDED
(AxB=C)
(B)

Total Score
(possible 500)
100%
TOTAL SCORE:

ASSESSOR:

DATE: SIGNATURE:

The Total Score is divided by 5 to provide the Quality Assessment Mark.

Score all tenders as above in accordance with your criteria and sub-criteria using the
marking system set out overleaf. Completion of the commentary sheet is also required.

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TENDER SCORE CRITERIA

CRITERIA

MARKS

Very high standard with no reservations at all about

acceptability.

High standard but falls just short of A.

Good standard.

Generally of
reservations.

Basic compliance only

Fails to meet the minimum requirements. (Bid

rejected)

good

standard

with

some

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QUALITY ASSESSMENT
COMMENTARY SHEET

TENDERER:- XYZ LTD.

CRITERIA
(Example Only)

COMMENTS

SCORE
(0 5)

Understanding of
Requirements

Added Value

Timetable

Relevant Experience

Capability

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STAGE 2

Discount any bids that do not meet your predetermined quality threshold. As an
example you may have a cut off that tenders that do not score [45] out of 100 will be
rejected and/or on those that score 0 in any Quality will be rejected.

Calculate the tender price taking into account whole life costs (see section 5.1
above)

Rank each tender in price order, highest first, as follows:-

(Example only)

RANK (by price)

TENDER

PRICE

QUALITY

XYZ Ltd.

100

60

ABC Ltd.

75

70

JKL Ltd.

71

50

EFG Ltd.

65

49

4.

Reject tenders which are unaffordable.

5.

Reject those tenders whose price is higher than tenders with a higher quality. In the

table
above the XYZ Ltd. tender would be rejected.
6.

Evaluate the remaining tenders to determine which tender gives the most
economically advantageous solution. In the event that the lowest priced acceptable
tender is not being recommended then the report recommending acceptance would
need to fully justify the recommendations by demonstrating that the additional quality
being procured is good value as against the lower priced acceptable tender.
Full written details of the evaluation process must be retained in order to provide an
audit trail. A spreadsheet should be completed in the following format.

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LOWEST PRICED ACCEPTABLE TENDER EFG 65

TENDER

PRICE/DIFFERENCE

COMPARISON/JUSTIFICATION

JKL Limited

71
6

ABC Limited

75
10

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APPENDIX B

QUALITY EVALUATION CRITERIA (Examples Only)

Capability

Quality of Service

Values of the authority

Period for project completion or delivery

Service characteristics

Technical capability

Experience of providing service

After sales service

User interface

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APPENDIX C

QUALITY EVALUATION SUB-CRITERIA (Examples only)

Capability Assessment

Will the service or product be delivered as per the specification

What is the timescale of the project and can this be achieved

Will it satisfy the needs of the authority and aspirations of the public

Has the potential supplier experience or provided a history of their capability

Support Services

Systems and Procedures

Quality control systems

Performance monitoring systems

Working practices

Support systems

Good practice guides

Adequate infrastructure

Meeting the Values of the Authority

Policies on Health and Safety

Impact on economy, employment

Social inclusion

Training and development policies

Skill levels of existing workforce and how will gaps be addressed

Retention and recruitment of staff

Equal opportunities

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User Inferface

Method of developing relationships with service users

What input will be available to the community

How will service improvements be managed

What customer care policies are in place

How will complaints and service failures be managed

Best Value Issues

How will methods of service delivery be improved

How will a self monitoring framework be established

What continuous improvement techniques will be used

How will future changes to specifications be managed

Environment and Sustainability Issues

How do the proposed methods fit with local agenda 21?

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